Author's creation, Disney's jackpot

Deborah Gregory wrote the Cheetah Girl novels. Her characters are in films and CDs, but she hasn't seen a penny of the profits.

NEW YORK — By all rights, Deborah Gregory should be sitting pretty: As a first-time author, she wrote the Cheetah Girls novels, a bubbly, 16-book series that became hugely popular with American tweens and teens. And she appeared to hit an even bigger jackpot when she sold the dramatic rights to the Disney Channel.

Her breezy, street-smart tales of five girls chasing pop music careers were turned into two hit television movies, and a third is now being filmed in India. Cheetah Girls CDs and DVDs have sold in the millions, and concert tours have hit more than 80 cities. Meanwhile, Disney's fabled merchandising machine flooded the market with Cheetah Girls shoes, dolls, toothbrushes, video games, backpacks, note pads, pillows, posters, T-shirts and the like.

Gregory expected to get a piece of the action when she signed a 2001 contract promising her 4% of the net from all of this activity. But like many other authors who have signed away dramatic rights, she says she never got a penny of the profits. Unlike screenwriters, who were backed by a strong union in their recently ended strike, most literary writers are at a disadvantage when negotiating with Hollywood. And it is difficult, if not impossible, for them to crack the safe.

Indeed, Gregory said she's pocketed $125,000 over the last nine years in option fees and payments for her title as co-producer of the movies. Although she's asked for them, she has never gotten "net profit participation statements" from Disney, spelling out details of expenses and revenues. If anyone is getting rich on this formidable franchise, Gregory noted, it's not the woman who created it.

"People think I must be living in a palace, when they think of the success of the Cheetah Girls," she said, sitting quietly in the cramped studio apartment she rents in Manhattan. "But look at this place. It's a . . . dump."

Gregory, an imposing and outspoken African American, doesn't mince words. She has a saucy, cheerfully profane sense of humor that she struggled to keep in check during interviews, and her anger over what has happened is palpable.

Disney officials, asked to explain why Gregory has not received any net profits -- and to estimate the collective revenue that "the Cheetah Girls has generated -- declined to respond. "Disney Channel doesn't comment on the terms of its contracts," spokeswoman Patti McTeague said in an e-mail.

"This is an old, old story in Hollywood," said literary agent Nicholas Ellison, who has represented numerous clients in book-to-film negotiations. When studios are asked why an author has not received any net profits, he said, they often point to expenses that have grown larger than expected and contend that a hit picture has not, in fact, made money.

It's called "Hollywood accounting," and in some cases studios may be on solid ground, citing legitimate costs such as promotion and development. But in other cases, contracts contain definitions of "net profits" that make it all but impossible for an author to collect money that once seemed tantalizingly at hand.

In one of the most notorious cases -- when columnist Art Buchwald sued Paramount over its use of his idea for the 1988 film "Coming to America," a film that grossed $350 million, and then later for its failure to pay him revenues -- a judge ruled in 1990 that the studio's internal accounting procedures were "unconscionable."

"Is Disney notorious for having a legal department the size of Western Europe and being particularly ferocious?" Ellison asked. "Yes. But that doesn't mean they're unethical. Or different from any other studio."

The stakes are high because 43% of Hollywood movies in the last five years were adapted from books and other written materials, according to estimates by the Writers Guild of America. What makes Gregory's case unusual is that she didn't simply write a book, she wrote bestsellers that led to a movie and marketing bonanza.

And there was no union able to help her. Writers often turn to the Authors Guild, a national organization based in New York, for advice in protecting their rights with publishers. But although the Authors Guild offers a checklist of things to keep in mind when dealing with Hollywood, it does not provide individual guidance or counseling.

"Hollywood deals are a trap for the unwary; they're almost intended to deceive," said Paul Aiken, executive director of the Authors Guild. "The best advice we give is that you should try to get as much of your money upfront. You can't count on net profit deals for anything."

Even if writers hire the best agents and lawyers, it might not make much of a difference, said veteran literary agent Jane Dystel, who has negotiated option deals on her own and in tandem with agents who specialize in book-to-film contracts.